Predicting the deforestation trend under different carbon prices

Project Title: Predicting the deforestation trend under different carbon prices

Background

Global carbon stocks in forest biomass are decreasing by 1.1 Gt of carbon annually, owing to continued deforestation and forest degradation. Deforestation emissions are partly offset by forest expansion and increases in growing stock primarily in the extra-tropical north. Innovative financial mechanisms would be required to help reducing deforestation. Using a spatially explicit integrated biophysical and socio-economic land use model we estimated the impact of carbon price incentive schemes and payment modalities on deforestation. One payment modality is adding costs for carbon emission the other is to pay incentives for keeping the forest carbon stock intact.

Data

Main data drivers of the model are a land cover map, net primary productivity, population density, gross domestic productivity, buildup- and cropland, agricultural suitability, corruption, discount rate, carbon price and their development over time.

Methods

The decision whether afforestation or deforestation will happen in a specific region is done by comparing the net present value of forestry and agricultural land. Beside, agricultural suitability, net primary productivity, population density the carbon price has much influence on the net present value of forestry. Information of where the deforestation will be and how much will stop deforestation, allows specifying the payment from paying all forest owners the same amount per t/C over pay only in affected regions the amount which will stop deforestation there to pay only in presently affected forests.

Results

Baseline scenario calculations show that close to 200 mil ha or around 5% of today’s forest area will be lost between 2006 and 2025, resulting in a release of additional 17.5 GtC. Today's forest cover will shrink by around 500 million hectares, which is 1/8 of the current forest cover, within the next 100 years. The accumulated carbon release during the next 100 years amounts to 45 GtC, which is 15% of the total carbon stored in forests today. Incentives of 6 US$/tC for vulnerable standing biomass paid every 5 year will bring deforestation down by 50%. This will cause costs of 230 billion US$/year if paid for all forests, 34 billion US$/year if paid in affected regions and 10 billion US$/year if paid only for affected forests. On the other hand a carbon tax of 12 $/tC harvested forest biomass will also cut deforestation by half. The tax income will, if enforced, decrease from 6 billion US$ in 2005 to 4.3 billion US$ in 2025 and 0.7 billion US$ in 2100 due to decreasing deforestation speed.

Outlook

Improvement of the model by including additional datasets and increasing the special resolution.